24th Feb 2015 08:17
LONDON (Alliance News) - Aer Lingus PLC, the Irish airline that's backing a takeover attempt by International Consolidated Airlines Group PLC, Tuesday reported that it swung to a pretax loss in 2014 as it made a large one-off payment into its pension scheme, although operating profit rose as it reported growth in passenger numbers and average fares.
The Irish flag carrier reported a pretax loss of EUR111.5 million for 2013, compared with a profit of EUR39.6 million in 2013, as it made a EUR190.7 million payment into the pension scheme following a settlement agreed between the airline, unions, the pension trustees and the Irish pension authority.
However, the airline's operating profit before exceptional items rose to EUR72.0 million, from EUR61.1 million in 2013, as revenue increased to EUR1.56 billion, from EUR1.43 billion. Its passenger numbers rose to nearly 9.8 million, from 9.6 million in 2013, while average fare revenue per seat increased to EUR98.93, from EUR90.43. Average fare revenue per passenger rose to EUR131.17, from EUR121.62.
Air Lingus' outgoing Chief Executive Christoph Mueller said the airline would now focus on cutting costs having got its pension scheme issues out of the way. It has introduced a voluntary severance scheme.
The airline has said it would be willing to recommend the financial terms of IAG's offer. IAG wants to add Aer Lingus to a stable that already includes British Airways and Spanish airlines Iberia and Vueling.
"To enhance these excellent results and to accelerate Aer Lingus' growth, it is the board's strong belief that the company should now take the opportunity to combine with IAG. In this combination Aer Lingus will operate as a separate business while gaining access to IAG's extensive network and benefiting from its scale. These significantly positive benefits will de-risk Aer Lingus' future, strengthen its operations and enhance the future success of the company," Chairman Colm Barrington said in the statement.
Aer Lingus shares were untraded in London early Tuesday. IAG shares were up 0.6% at 565.50 pence.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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